So I'm seeing that a lot of SFHs in DC splitting the top and lower levels into two different spaces to rent out. Many of these basement units have what are called 'wet bars'. What do they mean when they say this? Is it simply just a sink and a mini-fridge?
Do any of you know if there are any regulations or laws I should be aware of if I want to convert this 'wet bar' into a full kitchen which would include an oven and stove top?
You can only have a full kitchen if you have a licensed accessory dwelling unit, which is available only to owner occupants.
So if I occupy the unit and do the conversion while living there I'd be ok.
If I were to move out at a later date would I be able to rent it out separately, assuming I isolate it and split the meters?
You can not have 2 seperate units for rent. ADUs are only available to owner occupants. If you move out, you need to remove the stove and can only rent out the property in its entirety. (Or rent out rooms, limited to 6 unrelated individuals)
The owner-occupied restriction may eventually go away.
A "wet bar" is anything from a sink to a full kitchen minus "cooking facilities" (stove). Sometimes they include a 240V panel so that a tenant can bring in a countertop hot plate. A bedroom suite with a wet bar is not considered a "dwelling unit," but once a stove is included it magically becomes one.
Yeah, I'm pretty sure insurance wise, once you add that magical heating appliance (stove) into the mix in a second kitchen then it becomes a higher risk as well.
And what @Russell Brazil was saying is great knowledge on applicable laws.